By Shuli Ren

Mobile Internet is without doubt the most exciting aspect of the consumer Internet.

Reuters

Wedge Partners analyst Juan Jin thinks mobile gaming companies will be able to monetize first, followed by e-commerce, and last, advertising. Advertisers usually wait to see the economy gets better before spending, which partly explains the lag.

That is not a surprising proposition.

But Juan’s more interesting claim is that game platform providers will start to make money before the developers:

We think that traditional PC MMORPG companies, although starting late with mobile games, may see new growth opportunities in the mobile sector. However, the biggest near term beneficiaries from the rapid growth of China’s mobile game market, are the mobile app distributors and game operating platforms. The distributor and operating platform market is right now in the stage of consolidation, and we have already seen the leading platforms increasing bargaining power over game developers.

The leading mobile game distribution channels and operators include: Qihoo (QIHU), Baidu (BIDU) (with 91 wireless) and potentially Tencent Holdings (HK:700). In particular, we think Qihoo’s strong Q2 results and Q3 guidance have already reflected such a trend. We think the positive influence will continue and amplify in 2H of 2013.

On August 5th Tencent launched a major new version of Weixin, Weixin 5.0, which for the first time introduced online payments and virtual countenance purchase function. Shortly afterwards, Tencent launched 3 mobile games on the Weixin/QQ platforms, which are all ranked as top downloaded games in app stores. We think as Tencent just started monetizing its highly penetrated mobile platform (Weixin and Wechat all together have 236 million accounts), more positive results will show in 2H and over the long term.

About Emerging Markets Daily

Emerging markets have been synonymous with growth, but the outlook for individual nations is constantly changing. Countries from Brazil and Russia to Turkey face challenges including infrastructure bottlenecks, credit issues and political shifts. Barrons.com’s Emerging Markets Daily blog analyzes news, data and research out of emerging markets beyond Asia to help readers navigate the investment landscape.

Barron’s veteran Dimitra DeFotis has been blogging about emerging market investing since traveling to India and Turkey. Based in New York, she previously wrote for Barron’s about U.S. equity investing, including cover stories and roundtables on energy themes. Dimitra was among the first digital journalists at the Chicago Tribune and started her career as a police reporter at the Daily Herald in the Chicago suburbs. Dimitra holds degrees from the University of Illinois and Columbia University, where she was a Knight-Bagehot Fellow in the business and journalism schools. She studies multiple languages and photography.